Next Big Brand is back with another story of American fashion retailer Forever 21. Forever 21 was founded in 1984, and it is known for its unique collection and low price. In spite of trendy offerings, the company has been widely involved in controversies including practice issues, copyright infringement, accusations to religion.
Forever 21, Inc. is an American famous fashion retailer founder by Do Won Chang and Jin Sook Chang. Headquartered in Los Angeles, California and sells a wide range of beauty product, home goods, accessories, clothing for men, women, and kids. Began as Fashion 21 store in Highland Park, Los Angeles has grown into prominent clothing stores spread over 723 location around the globe. It has developed several clothing lines Love 21, Heritage and many more.
Forever 21 added plus size, originally called “Faith 21” (another religious nod), but now it’s called Forever 21+.
History
The original idea is originated from South Korea, Do Won Chang and Jin Sook Chang founded the company Forever 21 by targeting Los Angeles Korean American community. In the very first operation total sale of $700,000 is registered that further increase to $3.7 billion in 2013. Started with women’s clothing and expanding to the man’s clothing, kidswear, and home products is a bold step from the company.
According to Entrepreneur Magazine, Do Won Chang and his wife Jin Sook Chang immigrated to America in 1981 and worked three jobs to set up the first store. Chang was appointed as the Chief Executive Officer of the company, while his wife took over merchandising. Forever 21, preferred to work with domestic manufacturers to cut the cost and to introduce the latest fashion.
In 1989, the mall-based store was incorporated to boost sales. The average size of 5,000 square feet with 11 units set up in the California region. Later on, the store was opened at Miami’s Mall of the Americas. Forever XXI was launched in major metro areas like Miami, Chicago, and Los Angeles, averaging 24,000 square feet.
Forever 21 acquired Reference Clothing in 2003, out of bankruptcy for $ 3.5 million and started converting 14 those stores to rebrand as Forever 21 store. The first overseas project to set up store internationally was completed in November 2004 with the start of the store in the United Arab Emirates.
In 2006, Charlotte Russe Holding Inc. sold its Rampage stores to Forever 21 i.e. worth $14 million and included 44 locations. A report by Business Journal stated that some of the stores are soon converted into Forever 21 store and were reserved for a new concept offering a different kind of women’s clothing.
The revenue reached $925 million in 2015, as the company acquired Gadzooks Inc, for $33.1 million, spread across 243 locations. It had also operated a small boutique in Edmonton, Alberta. The principal competitors are Hennes & Mauritz B, The Wet Seal Inc, American Eagle Outfitters Inc and many more.
The Wet Seal Inc., a California based fashion retailer introduced low price, a high-speed approach similar to that of Forever 21. Store chains like J.C. Penney and discounters Wal-Mart and Target were becoming more style conscious, some of them like H&M, Old Navy start developing exclusive clothing lines in collaboration with well-known figures from the world of couture.
The company continued to expand in the United state of America, set up across 700 to 1,000 locations in the United States. In 2004, a three-story (27,500-square-foot) shop debuted in downtown San Francisco. In July 2006, a 40,000 square foot unit was built in Pasadena.
Employee relations and safety
The Asian Pacific American Legal Center and the Garment Worker Center, filed a lawsuit against Forever 21, charging them in charge of violating labour practice laws in September 2001. It was claimed that 19 employees received less than the minimum wage, that the hours on time cards were reduced, that workers who complained to the state were fired. Forever 21 denied the accusations, by quoting that “none of the workers named in the suit directly employed by the company”.
Garments of the company were boycotted for three years held throughout the United States by the garment workers which was featured in the Emmy Award documentary filmed at Los Angeles. Although the charge was further dismissed by U.S. District Court Judge Manuel Real, Forever 21 responded with a defamation suit in 2002.
Later in January 2012, five employees filed a class action lawsuit declaring that they were not compensated for the time they worked during their lunch breaks and the time spent on bag checks. A Subpoena was ordered in August 2012, against Forever 21’s as assisted by the Labor Department found that some suppliers had violated federal laws on wages and record keeping. After proceedings, Forever 21’s was ordered to compliance after the retailer failed to provide the documents.in September 2001olating labor practice laws.
The U.S. Department of Labor’s Occupational Safety and Health Administration recommended fines in excess of $100,000 for different stores for “serious safety hazards”.
Controversies
As reported by Forbes, 50 copyright violation lawsuits have been placed against Forever 21. Famous designer Diane von Fürstenberg, Gwen Stefani, Anna Sui, and Trovata have sued the retailer to copy the design of the product.
Susan Scafidi question Forever 21’s design process and argue that it is replicating the designs of others. Boisset, President of Merchandise quoted that Forever 21 works with merchant designers and not with designers, but would not make those merchants available for comment.
In 2015, Canadian media reported on Granted Clothing, whose designer noticed that their sweater designs had been stolen and sale on Forever 21’s website.
The software developers Adobe, Autodesk and Corel filed a joint lawsuit against Forever 21 for allegedly using unlicensed copies of software like Photoshop, AutoCAD and PaintShop Pro, respectively.
The Huffington Post insisted that the company sold tops with phrases such as “Holy”, “Love, peace, faith, hope, Jesus”, and “Thank God”. Similarly, Forever 21 has received attention in the media for printing the Bible verse “John 3:16” on the bottom of its trademark yellow bags.
The corporation maintains that it is not influenced by any religion of its founders. ABC News condemned Forever 21 for its “Allergic to Algebra” shirt in 2011 by declaring that the shirt had an anti-education and sexist theme.
Rachel Kane, a writer created a blog with the domain name WTForever21.com. Kane posted pictures of some Forever 21 items and post her views on the clothing. The blog’s become popular after being featured on the Jezebel blog.
The Center for Environmental Health found that Forever 21 and 25 other retailers and suppliers sold jewelry that included the toxic metal cadmium.
Operation in India
Forever 21 spread across 723 locations including 21 in India and 506 in United States of America and counting. Since its entry into the Indian market in 2010, Forever 21 is known for its trendy offers and chic collection at affordable prices. Forever 21 joined hands with DLF to complete operations in India from building the stores, act as partners. Of course. Though, the product selection is done by the international team. It started with three stores in Delhi and three stores in Mumbai, later on, expand to 21 stores across India.
Later in July 2016, Aditya Birla Fashion and Retail Limited acquired the exclusive online and offline rights to Forever 21’s India network. The partnership marks a great milestone in the creation of the largest integrated branded fashion player in India, with a strong foothold in the women’s wear segment.
Present Scenario
Due to trendy offerings and fashion conscious, Forever 21 has become the greatest source for the most current fashions at the greatest value. Forever 21 is growing fastly by acquiring new store environments with creative clothing designs and the necessary accessories for a powerful impression.
After years of expanding stores and moving into various locations, Forever 21 is in retreat. It has been quietly downsizing some of its biggest stores at malls across the country. At the Destiny USA mall in Syracuse, New York, where it expanded from one floor to two floors in 2012, it reverted to one floor earlier this year. At the Mall St. Matthews in Louisville, Kentucky—where it moved into a 110,000-square-foot, two-level store previously occupied by Dillard’s in 2011—it is down to just 30,000 square feet after ceding space to Dave & Busters and Ulta Beauty.
At the Riverchase Galleria outside of Birmingham, Alabama, it swapped a 66,000-square-foot store for space a third of the size last year. In March, it closed a two-story location on a busy corner in Toronto and directed shoppers to visit its closest store—located one block away.
The retailer is grappling with a sales slump as mall traffic declines and teens gravitate toward other fashion outlets like Zara and H&M. It has reversed course on its philosophy of bigger is better, yet has sought to hold on to its physical footprint by shrinking stores or opening smaller locations.
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